Jamaica Broilers Group Limited (JBG) is planning on increasing its investments in its US operations as it plans to expand its poultry processing plant in South Carolina, United States of America.

The poultry and animal feed distributor has seen rapid growth from its US operations which currently produces chicken from The Best Dressed Chicken Inc in South Carolina and fertile eggs from International Poultry Breeders LLC in Norman Park, Georgia. It acquired the poultry processing plant in September 2019 from Gentry’s Poultry Company Inc and has seen a rapid increase in demand for chickens processed.

As a result, JBG will be deploying around US$20 million to the expansion of the facility to boost its production capacity again.

“We’re going to be expanding that plant up in South Carolina. We’re on a very intensive capital programme building out the United States and I think that’s where we’re very laser-focused. When we bought the operations, we did roughly 150,000 birds a week and we’re significantly past that now. I think when we look at South Carolina, this expansion is going to continue making our US investments relevant to the size of the company. We will be growing even more so in the near future,” said JBG President and Chief Executive Officer Chistopher Levy at the company’s virtual annual general meeting on Wednesday.

Its USA operations contributed 39 per cent of the $75.72 billion in revenue in 2022 and 34 per cent of the $7.26 billion in operating profit.

Despite having to contend with the novel coronavirus pandemic, The Best Dressed Chicken brand is available in over 20 states with the group intending to make it a national brand. The group also has mills and hatcheries in different US states. JBG had considered an acquisition of Simply Essentials Poultry Plant in Iowa in 2021, but it didn’t materialise during the final stages. JBG’s first quarter up to July 30 showed that it earned $9.21 billion in revenue of which $814 million was made in its US subsidiary. This is more than double the comparative 2019 figures with the total asset base standing at $37.69 billion.

“The brand is gaining recognition, traction and quite frankly shareholders, it’s amazing what I’d call the brand equity that’s building. The ability to grow and seize opportunities in the United States is quite frankly beyond our imagination at this point,” Levy added.

Despite volumes sold for chicken hitting parity for 2019 versus the 2022 financial year, Levy confirmed that the Jamaican operation has surpassed its pre-pandemic volumes in the first quarter. JBG’s revenue from its Jamaican operation surpassed $13.69 billion for the first quarter with the segment result at $1.88 billion. Levy also mentioned the fact that the company’s exports grew 60 per cent year-over-year for the 2022 financial year which is driven on the company’s no antibiotic stance.

While JBG implemented a 10 per cent increase in January, it gave a price reduction of $12.50 per kilogramme in August for Grade-A Whole Bird and mixed parts. However, Levy cautioned shareholders considering the inflationary environment which currently exists which has seen the company’s margins remain under pressure.

“We’re seeing unprecedented volatility in the logistics, the price and stability of our raw materials and you also have a situation where your cost of labour and overall inflation cost are very real. Even though we were able to give in the current financial year a reduction, there are factors that work against that. Now, we try and find efficiencies in the company. We try and really look at the operations from a perspective of not only margin management, but what’s the long-term perspective in relation to our strategy vis-à-vis whether it’s purchasing, logistics or pricing,” Levy added.

One of the strategies the company is focusing on to contain costs and improve efficiency is to look at how it can reduce costs from energy plus other technological additions. The company added a new deboning machine during the year which Levy said allowed it to pick up some nice margins. The company is also testing out a 1 megawatt (MW) LNG (liquified natural gas) plant and is looking at implementing more solar options for some of its operations to produce power for the group in a broad way.

“We’re looking at it holistically. Remember, we don’t operate one facility. So, you have different requirements at different facilities. It’s not a one-size-fits-all in that regard. The gas solution in terms of LNG, in terms of the processing plant, is a good solution for that facility, but solar operations at that facility is not a good solution,” Levy stated on the energy plans.

While the company’s two major operational earners are growing steadily with reopened economies, JBG discontinued its operations in Haiti following a board meeting last month. JBG owned 85.48 per cent of the subsidiary which had $842 million in assets as of July.

“Yes, it was a very difficult decision, but it was the right decision. The human impact on folks that we’ve been working with for 12 years is significant and we cannot underestimate the human trauma that’s taking place in Haiti. The fact that we’re pulling out is a sad testimony to the consequence of bad governance and we need to recognise how important it is for us to be led well as a nation, people and a country,” Levy said on the state of Haiti.

JBG’s total assets are up 18 per cent year over year to $62.68 billion with the group having $42.25 billion as current assets. Total liabilities are up 20 per cent year over year to $40.58 billion with $25.03 billion as borrowings. While interest rates continue to rise, Levy noted that less than 10 per cent of the group’s debt was variable rate and it is in a good position from a weighted cost of capital perspective.

Equity attributable to shareholders was up 16 per cent to $22.01 billion. The stock price is down three per cent year-to-date to $28.20 which leaves it with a market capitalisation of $33.82 billion. The trailing 12-month earnings per share is $3.89 which leaves it with a price-to-earnings ratio of 7.25 times.

“We have more than enough opportunities both in Jamaica and the United States for growth. I’m very encouraged about the opportunities that face Jamaica Broilers at this time. So, my outlook for our organisation is positive,” Levy closed.